The Dog Days of Summer…

While it certainly feels like the Dog Days… I am a bit late with this update.  The Dog Days officially ended on August 11^th.  For those of us unsure from where the phrase originates it refers to the rising of the Dog Star, Sirius which rises at about the same time as the sun in the Northern hemisphere, July 3 thru August 11^th.

It is still hot in Austin though, Dog days or not.  Not as hot as last year, rain in July cooled things off considerably, but hot nonetheless.  I would like to say that its been quiet but that is not exactly correct, more likely the calm before the storm.

The storm after the runoff election has simply set the stage for what promises to be an interesting and turbulent legislative session. The consensus among the smattering of lobbyists I have visited with is that everyone is telling clients the same thing, “don’t expect to pass many meaningful bills.”  

We still have more elections to observe, the fall general elections and the ramifications from events up through the primary and eventual runoffs have not all played themselves out.  The stage is set and the actors have been chosen we just have to see the final act.  The Governor was successful in his efforts to change the composition of the Texas House, it just remains to be seen if these changes are sufficient enough to pass some sort of “education savings account” or voucher by any other name. 

Speaker Dade Phelan won reelection to his State House district beating David Covey by a narrow margin.  While it is not assured that he will be reelected as Speaker of the Texas House, I would not bet against him.  As a reminder there are 2 other Republicans who have announced their campaigns for Speaker. There could well be others who announce later this fall.  To date, the effort to unseat Speaker Phelan has not bubbled to the surface for others to see.  The last 4 Speakers (Craddick, Straus, Bonnen and Phelan) all won the seat in unique ways, not what one would have considered a “usual” speaker’s race, perhaps the “usual “ speakers race may not exist anymore. The Laney/Rudd type of race with clearly defined sides and months of campaigning may never happen again.  At least it does not appear to be happening this time. 

With the Republicans appearing unable to agree on a single candidate (at least not yet) the Democrats would appear to be ready to once again be king (or Speaker) makers.  This formula has worked in the past and would appear to be available to be utilized once again.  While Texas is reliably “Red” at the statewide and National level, there are some marginal Republican House districts that could be flipped with a larger than usual Democratic turnout for a potentially popular Presidential candidate.  Whether Vice President Harris is that candidate or not will play out over the next few weeks.  While certainly not enough to flip the Texas House, the possible increase in Democratic House seats could change the formula in the Speakers race. The unknown wildcard is Robert F. Kennedy, Jr. His eligibility for the Texas ballot will also influence something. What, remains to be seen.  He cuts across demographics and appeals to an odd cross section of voters.  How this might influence Texas House races is anyone’s guess.  Worth watching.

Texas now has 2 marine desalination facilities that have requested and received SWIFT funds from the Texas Water Development Board and the State of Texas.  The Corpus Christi plant will be located on the Inner Harbor Ship Channel which extends from the Gulf of Mexico to the Port of Corpus Christi.  The proposed Laguna Madre plant will be located on the North Shore of the Port Isabel Turning Basin off the Port Isabel Channel.  Laguna Madre requested $10 million to be used for the planning, acquisition and design of a seawater desalination plant.  The Corpus Christi project requested $535 million to be used for planning, acquisition, design and construction of the city’s inner harbor seawater desalination plant.  While Texas has many inland brackish water plants supplying significant amounts of water to a variety of customers, these are the first marine facilities that have not just been proposed but have made some significant steps forward toward actual construction and eventually providing water.  There are several more marine facilities proposed, we hope these successful steps help lead the way to more marine facilities making use of our gulf coast water resource.

The Senate Water, Agriculture and Rural Affairs committee met back on May 15^th, the discussion on desalination was front and center throughout that committee hearing.  Several desalination projects were discussed, questions asked and in general the presentations were well received.  The House has not yet had the Natural Resources Committee hearing but is expected later this fall.  We hope to continue the positive messages about desalination, both inland and now marine. While the recognition of desalination by decisionmakers is greatly appreciated, it is up to the industry to keep the message alive and relevant.  Texas will always need more water, desalination will always be part of the answer. The Texas Desal 2024 Annual Conference is fast approaching.  If you have not already made plans to attend, it is not too late, it promises to be an informative and relevant conference. The topics are timely, the speakers excellent and you cannot beat the price.  We hope to see you there.

We are just a few days out from the end of early voting for the May runoff election.  A few days  before we find out if the efforts to significantly change the makeup of the Texas House of Representatives is successful, or if the massive amounts of money that have been spent to date to make that change, have been spent in vain. I always try to go work a poll or 2 for some of our friends who need the help.  This year will be no different.  I have never really been sure if that makes a difference, but it makes the candidate happy.  Some of these runoffs could be decided by less than 2,000 votes.  Make sure you go vote for your candidate and take someone with you.  It will make a big difference. 

The disruption caused by this current election cycle reaches beyond just those individual candidates running for office.  The staff turnover, other member angst and lobbyists handwringing have all reached an 11 on our amplifiers.  Lobbyists don’t like change.  Status quo predictability is our comfort zone.  However, I feel certain that come next January 14, 2025, members will take an oath, the session will begin, bills will be filed, committees will meet, life in the Texas legislature will continue.  Every session is different, this one will be just the same.

The level of money being spent in this set of contested House primary races is truly unprecedented.  In several races, millions of dollars being spent between the initial primary election and the runoff.  (Keep in mind this is a $600 a month part-time job).  The race for Speaker Phelan’s House seat has become the most expensive House race in history.  To date, (primary and runoff) a total of $6.9 million has been spent.  $3.5 million on pro Phelan campaigning, $1.6 million directly on behalf of his opponent (Covey) and $1.8 on negative Phelan ads.  In many of these contested House races the total turnout in the runoff could be as small as 2,000 to 2,500 votes.  That puts per vote cost through the roof.  If Speaker Phelan is successful in his runoff, he will certainly run for Speaker again, and while it could be a challenging race, he would be the odds on favorite to win.  If Mr. Covey is successful, he will be a freshman House member, not the Speaker.  Whatever benefits the gulf coast enjoyed with Dade Phelan as Speaker will be gone.  Being a freshman House member is a tough, challenging transition.  Years after a successful time as a representative, a former House member told me I answered one of the most important questions that she needed answered during her first day of the session, that question was “where is the nearest bathroom?”  Another session, another freshman member, I found the member attempting to enter his capitol office before he was sworn in and finding the door locked asked how he could get a key.  I had to tell him he can’t get in until he is sworn in.  Being a freshman House member is difficult.  Making an impact as a freshman even more so.

The Senate Water, Agriculture and Rural Affairs committee had an interim hearing on Wednesday, May 15^th.  There were several items of interest on the agenda, not the least of which was a discussion of desalination efforts around the state.  An update was offered from the existing facility in San Antonio and El Paso with additional testimony (written and oral) about several potential projects around the state.  All told, a good portion of the hearing was devoted to discussion of ongoing and proposed desalination efforts.  It was nice to hear desalination taking such a prominent role.  I do believe there is a growing interest in Desalination outside of just Senator Perry.  The industry should take advantage of this mindset going forward.  The sooner we see more desalination (not just expansion of current operations) the better.  With the ongoing interest along the coast for new desalination let’s hope this high level of interest stays around into the upcoming legislative session. 

In addition to the desalination discussion, the committee also heard about current potential cyber-security efforts around Texas water systems.  A variety of witnesses including from the Tx. Department of Information Resources and the Texas Public Policy Foundation.

An update on the Produced water efforts was also on the agenda with testimony from the Produced Water Consortium, Texas Oil and Gas Association and the Texas Railroad Commission.  There were several other presentations and a host of witnesses dealing with Texas Water workforce, the need for new water sources and the state of water infrastructure in Texas.  It was a long and very comprehensive hearing.  Not sure what if any legislation for next session will actually come from this hearing but a wealth of information was presented.  There is a current estimation of another budget surplus going into next session.  It will not be as large as what we saw last session but still a significant amount of additional money.  One of our goals going forward is to increase the budget amount that was deposited into the New Water Fund. Let’s hope that by the time we get to January, our decision makers will not have forgotten just how hot and dry our upcoming summer is going to be.  A gentle reminder of our never-ending need for additional water.

The Texas Water Development Board posted a stakeholder meeting to discuss the Texas Water Fund on Wednesday February 20^th.  This is one of the early steps to eventual rulemaking based on the passage of SB 28^th during the most recent legislative session.  As a reminder, the legislation included potential funding of ($1 Billion) which was passed by the voters during the 2023 November constitutional amendment election.  The Senate initially sought $3 Billion and the House version upped that amount to $5 Billion.  The final budget negotiations ended with the actual $1 Billion figure that was on the November ballot.  These stakeholder meetings will focus on suggestions from interested parties on how those funds might actually be spent and the hoops that will need to be cleared to potentially qualify for said funds.  In talking to the agency, actual rulemaking could potentially occur sometime later this summer/fall with funds being made available late this year or possibly early next year.  While this sounds like a LONG time for these decisions to be made, this time frame is pretty typical in the normal rule-making process. 

On another note, longtime Executive Administrator Jeff Walker has retired.  Jeff was an excellent administrator and a joy to work with.  Always helpful and conscientious, Jeff was the best type of public servant and will be missed.  Bryan McMath has been named Interim Executive Administrator.  Bryan has been with the agency since 2018 and before that has a 15-year history in the Capitol for a variety of members including, Senators, House members and a Speaker.  Bryan is a very talented and smart public servant and the agency will not miss a beat under his leadership.  I hope he gets a strong consideration by the board to make the Interim appointment permanent.    

I was discussing the recent election results with a friend and he reminded me of an old Saturday Night Live skit that asked the question, Quien es mas macho?  My answer after the Tuesday March 5^th primary election is Senior Abbott es mas macho.

You can question the methods used, where the money came from, and the long-term ramifications, but you cannot question the results. 

For most of our history we have had 1 term Speakers of the Texas House.  Going back to reconstruction, the office was held by one man for a single term with a few exceptions.  Ruben Senterfit in the early 50s served 2 terms, Waggoner Carr in the late 50s served 2 terms. Ben Barnes and Gus Mutscher both served 2 terms in the late 60s and early 70s.  After Price Daniel Jr.’s 1 term, Billy Clayton began the trend of longer term Speakers lasting 4 terms, Gib Lewis and Pete Laney both served 5 terms as Speaker.  Tom Craddick served 3 terms and Joe Straus 5.  Recently Dennis Bonnen served 1 term (shortened by scandal) and now we find ourselves at the end of Dade Phelan’s 2^nd term.  Speaker Craddick’s run was shortened by a Republican revolt in the House which brought his rein to an unexpected end which is where we might find ourselves once again. 

To the best of my recollection, the only Speaker to lose his primary election was Rayford Price in 1972. Rayford replaced Gus Mutscher who got caught up in the Sharpstown scandal along with Ben Barnes and Governor Preston Smith, although Gus was the only person who was convicted and sentenced (later overturned on appeal). 

Which brings us to the recent election results.  Speaker of the House Dade Phelan came in 2^nd in his primary election to political novice David Covey.  The runoff for this and the other still undecided contested primary elections is on May 28th. All of which begs the question:

Why would anyone vote against arguably the 2^nd or 3^rd most powerful elected official in state government.  This position of power obviously benefits the people of House District 21 and in this case his replacement would NOT be in a similar position of influence.  That one is a head scratcher, if for no other reason than a selfish one for the people that live in District 21.

The amount of money necessary to force that outcome must be truly significant, the actual amounts we may never know.  Regardless, a significant number of residents believe they would be better off with someone who is not only inexperienced in state government, but also will not hold any recognizable position of influence.  If the Speaker prevails, (no guarantee there) he will probably face noticeable headwinds in seeking reelection as Speaker.  How this will impact those wishing to participate during the upcoming legislative session remains to be seen, but business as usual (whatever that means) will not be the order of the day.  The Governor, Lt. Governor, Attorney General and AG commissioner targeting specific House members and the Speaker is unprecedented.  Certainly, in my time around the capitol I am not aware of this type of effort, ever.  It does not really make for a congenial atmosphere.  Passing legislation (never an easy task) will not be any less difficult.  Careful of your bill authors…

The Speaker was not the only targeted House member.  The effort by the Governor to root out those who defied him on his voucher initiative, was well organized and extremely well funded.  Of those that  were targeted, 8 were defeated on election night and 8 were forced into a runoff.  Since we don’t know exactly how much was spent, it is difficult to quantify exactly but regardless, that’s a pretty good outcome for whatever amount was spent.  The final score has yet to be tallied but he and his supporters should be pleased with what they accomplished.  How this will translate into the general election and actual members in the House is unknown.  There are still some swing districts in Texas, although not many.  Colin Allred, the Democratic nominee for US Senate against Senator Ted Cruz will have money to spend, quite a bit actually.  While dollars will be spent in traditional Democratic efforts, it is safe to say that money will also be spent against Senator Cruz in these 50 to 55% Republican districts.  These efforts will have an impact on some of those down ballot races and the Ds are running candidates in almost all the House seats.  It is not out of the realm of possibility that the Ds pick up 2 or 3 seats in the Texas House during this cycle. 

All of these “unknowns” make for a very uncertain future.  How to move forward, stay with incumbents who have been supporters and risk going against the Governor’s candidates and expect his retribution. Forsake long time relationships and back the Governor’s picks, knowing full well that these could be unqualified and single issue types who have no interests beyond their campaign flyers.

“Like sand through the hourglass, so are the days of our lives.”  I’m quoting the soap opera not Socrates.

This too shall pass, all we have to do is swallow it.

Kyle

The new year has brought an intensity to the campaign season and an end (at least for now) of legislative Special Sessions.  With the campaign season now in full swing, fundraising has become the central focus for virtually all candidates/office holders.  Even those who are not on the ballot are raising money at an alarming rate, making it a bit more difficult for those who do have races to keep pace with their projected budget needs.  It has become a unique situation where the biggest opponent, certainly in the fundraising realm, to many rural House Republicans is their own statewide office holders, Governor Abbott, Lt. Governor Patrick, Attorney General Paxton and in some cases Ag Commissioner Sid Miller.  If it were not for the opposition support of these current office holders, many of these “targeted” House members might not even have primary opposition.  Once the primary season has concluded a large percentage of these members also have general election opposition.  This is not unusual in Presidential election years because of the large voter turnout, even in many of these strong Republican districts.

Over the past several days I have had the opportunity to hear from a number of incumbent candidates and those seeking open seats speaking about the current condition of their contested primary races.  Probably the single theme throughout these discussions has been the onslaught of money from both in-state and out-of-state interests. When this election cycle comes to an end, the amount of money spent will do doubt reach record heights. It has always been expensive to run for election in Texas, from the geographically smallest Texas House seat up to and including our statewide federal and state offices, and this year will be no exception.  While none of our state-wide Texas state government office holders (Gov, LT. Gov, AG, etc.) are up for election, one of our US Senators (Ted Cruz) is on the ballot this year and will have general election opposition in November. 

The bulls eye attached to a not insignificant number of Texas Republican House members was put there because of their votes on 2 issues.  Their vote to impeach current Attorney General Ken Paxton and their vote against ESAs (Education Savings Accounts) or vouchers.  In some cases (not all) some rural House republicans have both targets on their back.  Governor Abbott actively recruited candidates to run against members who voted against the ESA bill and is also supporting those candidates with monetary support.  That level of support could be substantial.  Governor Abbott is also actively campaigning for these candidates by attending local district events and providing other campaign assistance.  Attorney General Ken Paxton is engaged against his impeachment foes as well. He is actively participating in local district events in support of his endorsed candidates and may be providing campaign funds.  Certainly, his financial supporters, some of whom are very wealthy are supporting this group of hand-picked candidates.  Whether these efforts prove successful with a significant turnover in targeted members will be answered in March.  If this effort can influence potential legislative action in the future out of fear of retribution is a question we won’t know until 2025.   

As for campaign themes that bubble to the surface in these discussions, border security and inflation take top spots from both Republican and Democratic candidates.  While these issues are typically “national” in scope, they resonate with the local constituency who seek answers from all their elected officials, whether those local elected can impact these issues or not.  Border security or immigration is clearly a federal issue usually overseen by the US House, Senate and the President.  While these entities seem unable to address the issue to anyone’s satisfaction, Governor Abbott and the Texas legislature stepped into the void and have/are attempting to influence the situation.  The ultimate outcome will be determined by the courts and those decisions could have lasting and significant implications.  If every state is allowed to ultimately determine its own immigration policy, the havoc created would be substantial and confusing to say the least.  Recently the US Supreme Court told the US Border Patrol they could remove the razor wire that was installed across the Rio Grand by members of Operation Lone Star, the Texas state border security operation.  Will this set up a confrontation between those officers and the US Border Patrol?  That would not seem to end well, stay tuned…

I feel staying current on the issues discussed above is vital to our future success for any trade group.  These political activities, while not directly impacting the Texas Desalination Association directly impact the overall political climate in which we all work to a greater or lesser degree.  While there has always been a certain level of “discord” and disagreement within the legislative process, I firmly believe that people of good character can have reasonable differences on any number of issues, the current atmosphere makes it challenging to accomplish anything, even the non-controversial.  The times they are a-changing and we will all have to adapt to this new paradigm.   

After visiting briefly with TWDB leadership I got a tentative timeline on the rule making and finalization of the “New Water” funds.  We should expect rulemaking early this summer, “June-ish” and possible funding late in the year, even possibly early next year.    Recent headlines indicate that Corpus Christi MAY (emphasize may) have taken a step or steps to begin serious work on a substantial marine desalination facility.  I hope it’s true.  Pardon my skepticism but…

It’s impeachment season. In less than 30 days the current Texas Attorney General will face his impeachment jury made up of the 31 Texas senators, including his wife.  The judge, Lt. Governor Dan Patrick (non-lawyer) will oversee at least some portion of the trial and make judgements on the various legal questions that arise. General Paxton’s legal team is working hard at suggesting the Senate drop many of the 20 impeachment charges, only time will tell how successful that effort is. 

The discussion around additional special sessions has, at least for the moment, been put on the back burner till the conclusion of the impeachment proceedings.  The impeachment hearing is a “Senate only” event and does not require the Governor or anyone else for that matter to be involved.  The assumption is the Governor will call the legislature back into session upon the conclusion of the impeachment hearing.  The subject matter for that session will more than likely be some type of school voucher program.  This should occur sometime later this fall.

With no other real legislative activity currently under consideration, it is member retirement/campaign announcement/fundraising season.  5 current House members have already announced retirements: Tracy King (D) Uvalde, Four Price (R ) Amarillo, Lina Ortega (D) El Paso, Able Herrera (D) Robstown and Matt Schaefer (R) Tyler, there undoubtedly  will be more to come.

Its summer in Texas so it must be hot.  Just how hot this year? As of today, we are at 43 consecutive days of 100 degrees plus in Austin. This is the longest streak in recorded history.  As of the 10^th of August, most of Texas is in a Moderate Drought or worse.  At the beginning of this month Governor Abbott renewed and expanded the current drought declaration to 189 counties.  That number will probably be expanded. In addition, Governor Abbott recently issued a disaster declaration for 191 counties in response to widespread wildfire activity.  August is usually our hottest month and, traditionally with no rain projected till sometime in mid to late September, the drought situation and the fires will simply get worse.   2011 is the current 1-year drought of record, we will see if we break that this year. The recent tropical storm helped break the drought a bit in south Texas and some areas in west Texas but did not significantly impact the overall state condition.

This past legislative session SB 28 passed which authorizes (if the constitutional amendment passes in November) spending $1 Billion dollars on “new” water and fixing local water infrastructure (leaky pipes). Drought seems to the norm now rather than the exception.  Hopefully those who typically vote in November constitutional elections will vote in favor of this provision.  $1 Billion sounds like a considerable sum, but in the case of both new water and repairing infrastructure it is an actual drop in the bucket, but better than nothing.

An additional item on that ballot is a substantial increase in the “homestead” exemption.  This would raise this benefit for homeowners from the current $40,000 exemption to $100,000 exemption.  The cost of this increase accounts for the majority of the $29 Billion price tag on all the November Constitutional amendments.  That cost being approximately $18 Billion. 

There is an interesting article in the current issue of the Texas Tribune about our current water usage and the drought, particularly here in central Texas.  It is worth reading.  Regardless of whether we agree with everything in the article or not, there is no question that more people are living in this area and that we are using more water.  In future sessions, there will be on-going and intensified efforts to restrict, limit and/or curtail landowner rights to their property, namely their groundwater.  In addition, those who do not consider desalination a “viable” or environmentally friendly option will continue to speak against what they do not know or understand.  While conservation and reuse are certainly part of the answer, expanded desalination will continue to be a growing component of Texas water future.

 I am including a link with this update to the article in the Texas Tribune.

Dry springs in Central Texas warn of water shortage | The Texas Tribune